Older equity release customers more likely to give the money away

18 March 2009 / by Rachael Stiles

The older a homeowner is, the more likely they are to give some of the cash they get from an equity release plan to their family, research from Key Retirement Solutions has shown.

Almost 20 per cent of homeowners aged 75 or older who take out an equity release plan will give some of the money to members of their family, the study found.

In comparison, just six per cent of homeowners in the 55-59 age bracket give some of the money to their families.

Similarly, the younger a homeowner is when they take out an equity release plan, the more likely they are to use the money unlocked from their homes for things other than helping out their families financially.

For example, 69 per cent of those aged 60-64 use the money they get from an equity release scheme to pay off their mortgage or other outstanding debts that they have.

And it is a similar picture for those homeowners in the 55-59 age range, 67 per cent of which use equity release for paying off debts.

In the 60-64 age bracket, almost 70 per cent of equity release customers use some of the money for this purpose, whereas just over 50 per cent of those aged 75 or older use the money to clear debts.

Homeowners in the 70-74 age group are the most likely to use their equity release money for going on holiday, with nearly 45 per cent doing so, compared to less than half this proportion in the 55-59 age group using the money for holidays.

Dean Mirfin, business development director Key Retirement Solutions equity release, said that, as expected, the results show significant differences in homeowners' reasons for taking out equity release plans dependent on their age.

"This analysis helps to further ensure that product design and advice continues to fulfill the needs of those looking to release equity from their homes and to cater for needs over time," he said.

"The most popular reasons at all ages do not come as a great surprise, being home improvement, repaying debt and holidays. Whilst few appear to release equity for an extra monthly income, many incomes are directly improved by the repayment of debt."

He added that the research continues to reveal how "for the many thousands in or approaching retirement, the need and desire to release equity is targeted at those outcomes which will have a dramatic, positive, effect on their standard of living."